How to Use Equity from Your First Home to Upgrade in Kitsap County

If you’ve sold your first home and are ready to upgrade in Port Orchard, Bremerton, or Silverdale, you’re not alone. Many Kitsap County homeowners are taking advantage of the equity they’ve built over the past few years to move into larger, better-located, or higher-value homes.

Whether you’re growing your family, seeking more space, or investing in long-term stability, your home equity can be the key to your next chapter. This guide explains how to calculate, access, and strategically use that equity — plus what to consider in Kitsap County’s evolving market.

Why Kitsap County Homeowners Have Built So Much Equity

Home equity represents the difference between your home’s market value and the amount you still owe on your mortgage. In Kitsap County, consistent appreciation has fueled strong equity growth for first-time owners.

According to recent market data, the median home price in Kitsap County is around $582,000, up roughly 6% year-over-year.

• Port Orchard median: approximately $550,000
• Bremerton median: roughly $570,000
• Silverdale median: around $640,000

If you bought your first home even a few years ago, you may now hold tens of thousands — even hundreds of thousands — in equity. That equity can help you purchase your next property with a larger down payment, better loan terms, and smaller monthly payments.

💡 Local insight: Kitsap County home values have risen more steadily than many neighboring markets, thanks to proximity to Naval Base Kitsap, Seattle-area commuters, and limited new-home inventory.

How to Estimate Your Home Equity

Before upgrading, determine exactly how much usable equity you have.

Step 1: Get Your Current Market Value

Request a Comparative Market Analysis (CMA) from a local agent or a certified appraisal. Online tools can provide a rough idea, but local data is more accurate.

Step 2: Subtract Your Mortgage Balance

Check your most recent mortgage statement.
Example:

• Current home value: $525,000
• Remaining mortgage: $375,000
• Estimated equity: $150,000

Step 3: Account for Selling Costs

Subtract around 7–8% for realtor fees, taxes, and closing costs.
That leaves approximately $138,000 of usable equity — enough for a 20% down payment on a $690,000 move-up home.

Smart Ways to Use Your Home Equity

There’s no single “right” way to use equity. Your approach depends on your finances, market timing, and lifestyle goals.

1️⃣ Sell First, Then Buy

The simplest and most common route.

• You sell your current home, pay off the mortgage, and use the proceeds for your next down payment.
• Many Bremerton or Silverdale homeowners choose this route to free up maximum equity and strengthen their next offer.

Pros: Full access to cash, clean debt slate, straightforward financing.
Cons: May need temporary housing between closings.

2️⃣ Cash-Out Refinance or HELOC (Keep Your First Home)

Want to keep your first property as a rental or long-term investment? You can refinance or open a Home Equity Line of Credit (HELOC) to access part of your equity.

• For instance, a Port Orchard homeowner with $200,000 equity could pull $100,000 for a new down payment while retaining the first property as an income-producing asset.

Pros: Retain appreciating property, diversify investments.
Cons: Increases total debt and may affect loan ratios for your next mortgage.

3️⃣ Bridge Loan for Simultaneous Transactions

If you find your dream home before your sale closes, a bridge loan can temporarily fund the new purchase. Once your first home sells, you use the proceeds to pay off the bridge.

Pros: Keeps your move simple and fast; avoids missing out on the perfect listing.
Cons: Higher short-term payments and rates.

Financing Considerations for Move-Up Buyers

Using your equity strategically can improve your next mortgage terms — but planning is key.

• Down payment: Equity can cover 10–30% of your next home, potentially removing PMI.
• Loan type: Many move-up buyers transition from FHA/VA to conventional loans for flexibility.
• Credit check: Your lender will verify income and DTI again, even if you’re a current homeowner.
• Interest rates: As of late 2025, mortgage rates in Washington remain moderate; locking early helps mitigate volatility.
• Loan coordination: Pre-approval with a local lender lets you align sale and purchase timing efficiently.

💡 Tip: At Clint Edwards Mortgage, we help clients pre-approve before listing their current home, so they can shop confidently once they accept an offer.

Timing the Market in Kitsap County

Local timing can influence how far your equity goes.

• Spring (March–May): Most listings, strongest competition.
• Summer: Great visibility for homes with curb appeal.
• Fall/Winter: Fewer buyers, but sellers are more motivated — often a great time for move-up purchases.

Kitsap’s military population also creates steady demand year-round, especially near Silverdale and Bremerton, so move-up buyers rarely need to “time” the market perfectly to succeed.

The Pros & Cons of Using Your Equity Now vs. Waiting

In most cases, using your equity now offers better long-term ROI — especially if you’re upgrading to a property that fits your family’s growth for 10+ years.

Tax Considerations When Upgrading Homes

When you sell your first home, you may qualify for a capital gains exclusion of up to:

• $250,000 (single filer) or
• $500,000 (married filing jointly)

Requirements:

• You’ve owned and lived in the home for two of the last five years.
• The property served as your primary residence.

You can reinvest the proceeds without penalty; just keep records for your tax professional.

Also, note that mortgage interest on your next loan (up to $750,000) may remain deductible under IRS rules — a meaningful benefit for move-up buyers.

Avoiding Common Pitfalls

1. Misjudging true net proceeds:
   Don’t forget transaction fees, repairs, staging, or moving costs when calculating usable equity.
2. Over-borrowing against equity:
   Avoid pulling every dollar; maintain an emergency cushion.
3. Failing to coordinate closings:
   Work with your lender early to prevent gaps between selling and buying.
4. Underestimating ongoing costs:
   A larger home can bring higher insurance, utilities, and maintenance.
5. Neglecting pre-approval:
   Even seasoned homeowners need updated lender documentation to qualify smoothly.

Local Example: Kitsap County Move-Up Success Story

A family in Bremerton purchased their first home in 2018 for $360,000. In 2025, it appraises at $520,000 — a $160,000 increase.

After selling, they net about $140,000 after fees, which they roll into a 20% down payment on a $700,000 Silverdale home. Their new monthly payment (thanks to a lower LTV and no PMI) remains similar to their old one, even though they’ve moved into a larger property.

That’s the power of strategic equity use.

Checklist for Move-Up Buyers in Port Orchard, Bremerton & Silverdale

1. Get your current home appraised or valued by a trusted local agent.
2. Review your equity estimate and calculate after-sale proceeds.
3. Meet with a local lender to discuss move-up loan scenarios.
4. Explore Kitsap neighborhoods that match your upgraded goals.
5. Coordinate listing and new purchase timelines with your lender.
6. Keep 3–6 months of reserves after your move for flexibility.

Why Work With Clint Edwards & Sammamish Mortgage

Moving up in Kitsap County requires more than financing — it takes timing, planning, and local insight.

As part of the Sammamish Mortgage team, Clint Edwards helps homeowners in Port Orchard, Bremerton, and Silverdale:

• Evaluate home-equity options and net proceeds.
• Structure bridge or cash-out strategies when needed.
• Navigate concurrent sales and purchases with ease.
• Secure pre-approvals tailored to move-up buyers.

Ready to turn your home equity into your next dream home?
Contact Clint Edwards Mortgage today for personalized guidance and a custom loan plan designed for Kitsap County move-up buyers.

FAQs

Q1: How much equity should I have before upgrading homes?
Ideally, aim for 20% or more equity before moving up. This gives you flexibility for a strong down payment, covers transaction costs, and reduces your next loan’s loan-to-value (LTV) ratio.

Q2: Can I use my home equity before selling my current home?
Yes. You can tap into it through a cash-out refinance or home equity line of credit (HELOC) before selling — especially if you plan to keep your first home as a rental. However, consult your lender to ensure your DTI (debt-to-income ratio) still qualifies for the next mortgage.

Q3: Should I sell first or buy first?
Most move-up buyers in Kitsap County sell first to maximize available funds. But if timing is tight, a bridge loan or contingent offer can help you secure your next home before your current one closes.

Q4: How do I estimate how much equity I have?
Subtract your mortgage balance from your home’s market value (confirmed through a CMA or appraisal). Then, reduce that by roughly 7–8% for selling costs to determine your true usable equity.

Q5: Can I avoid paying capital gains tax when selling my first home?
In most cases, yes. The IRS allows up to a $250,000 exemption (single) or $500,000 (married filing jointly) if you’ve owned and lived in the home for two of the last five years.

Q6: Is it better to use equity for a down payment or renovations?
If you’re upgrading homes, applying equity toward a down payment typically provides the best long-term financial benefit. However, if your current home needs work before listing, you can allocate part of it for value-boosting repairs first.

Q7: What if home prices drop after I sell?
Because Kitsap County has strong demand and limited inventory, short-term drops tend to be minimal. However, locking in your current gains by selling now can help protect your equity from future market fluctuations.

Q8: What’s the difference between a HELOC and a cash-out refinance?

• HELOC: Revolving credit line secured by your home, typically used short-term.
• Cash-out refinance: Replaces your old mortgage with a larger one and pays you the difference in cash — great if you want a fixed rate and longer term.

Q9: Can I reuse my VA loan entitlement for a move-up home?
Yes! Eligible veterans in Kitsap County can restore entitlement after selling a prior VA-financed home, or use remaining entitlement for another purchase (great for larger homes in Bremerton or Silverdale).

Q10: How long does the move-up process usually take?
Most buyers complete the sale-and-purchase cycle in 30–60 days, depending on market conditions and lender processing times. Pre-approval and strong coordination with your lender can shorten this window.

Q11: Can I use my equity to pay off other debts before buying again?
Absolutely. Some homeowners use part of their proceeds to pay down credit cards, car loans, or student loans, lowering their DTI and improving mortgage eligibility for their next home.

Q12: What are the biggest mistakes move-up buyers make?

• Overestimating sale proceeds
• Underestimating new-home costs
• Skipping pre-approval
• Failing to time sale and purchase closings correctly
• Not consulting a local lender early enough

Pro Tip: Working with a Kitsap-based lender like Clint Edwards Mortgage ensures your financing aligns with the fast-paced local market.